Mortgage Insurance

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Mortgage Insurance

An insurance policy that provides coverage to a lender in the event that a borrower defaults on a mortgage. This ensures that the lender does not incur a loss if the borrower is unable to repay the loan. While the lender pays the premium, it generally passes on payment to the borrower (and may roll it into the monthly mortgage payment). A lender may require a borrower to pay for mortgage insurance in certain high risk situations. See also: Loan-to-Value Ratio.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Mortgage Insurance

Insurance provided the lender against loss on a mortgage in the event of borrower default.

In the U.S., all FHA and VA mortgages are insured by the federal government. On other mortgages, the general practice is to require mortgage insurance from a private mortgage insurer when the loan amount exceeds 80% of property value. Borrowers pay the insurance premium in all cases. See Private Mortgage Insurance.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Lenders can also activate the mortgage insurance policy by notifying MGIC electronically after loan consummation.
To hedge against the possible default loss, the mortgage borrower is required to buy a mortgage insurance policy for compensating the possible loss according to a prespecified proportion.
Conditional on both [Z.sub.T] = z and a given correlation [rho], the fair premium of any mortgage insurance policy is given by
He had been willing to do so because he believed it was a mortgage insurance policy. The kicker: The policy had been obtained through an insurance agent with whom Tami was having an extra-marital affair.
Once the deal is approved, CMG employees will still provide the point of contact and sales to credit unions, and the company will still have a 15% reinsurance stake in every mortgage insurance policy that the new CMG MI writes, Buchheim explained, adding that CMG had decided to add its part of CMG MI to the sales deal in order to attract a strong financial partner like Arch Capital.
Insurance giants Aviva were defrauded of pounds 200,000 on a mortgage insurance policy. AIG were conned out of pounds 40,600 when the couple cashed life insurance.
Insurance giant Aviva, which used to be known as Norwich Union, was defrauded of pounds 200,158.06 when the Darwins made a claim on a mortgage insurance policy. AIG was conned out of pounds 40,603.01 when the couple cashed in a life insurance policy.
The homebuilder will pay buyers' mortgage insurance policy for three years which means that if they lose their job, for example, their mortgage will still be paid.
Most mortgage lenders insist customers who borrow more than a certain percentage of the property's value, often 75 per cent, have to take out a mortgage insurance policy.
Consumers considering these plans should be sure they understand all the fees involved, what portion of those fees can be financed, what kind of mortgage insurance policy is included, the exact terms of the interest rate, whether lenders can share in any appreciation on a home at settlement, and if there is a penalty for early withdrawal.
Most mortgage lenders insist that customers who borrow more than a certain percentage of the property's value, often 75 per cent , have to take out a mortgage insurance policy.

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